Interesting article on law.com today:  KPMG’s Knight in Shining Armor:

It was a festive day for Sven Erik Holmes. Family, friends and colleagues surrounded him in the Tulsa federal courthouse last March as his official portrait was unveiled. It was the last day on the job for Holmes, who was retiring as chief federal judge for the Northern District of Oklahoma, after 10 years on the bench.

Five months later, Holmes was back in a federal court, without his robes and under drastically different circumstances. This time, the U.S. Attorney in Manhattan looked on as Holmes, now the chief legal officer for KPMG, signed a document to keep his company from being criminally prosecuted. Afterward Holmes remembers someone quipping: "It used to be the full force of the U.S. government behind your signature. Now it’s on top of your signature."

The deal was a lifesaver for the New York-based auditing firm, which is caught up in what the government calls "the largest ever tax shelter fraud." The document allowed KPMG to enter a so-called deferred prosecution agreement: The feds agreed to defer prosecuting KPMG on one count of conspiracy to defraud the Internal Revenue Service until Dec. 31, 2006. If the accounting firm adheres to the terms, the charge will be dropped. Holmes describes the deal as KPMG’s last resort, adding, "Society has a very real interest in [punishing] this kind of wrongful conduct." …